The Canadian dollar surges across the board after better than expected jobs data. Canada’s unemployment rate was pushed lower to 7.1 percent in September from 7.3 percent in August after 60,900 new jobs were added last month. Economists had forecast a mere, 10,000 additional jobs. August saw a decline of 5,500 Canadians in the work force.
The number of Canadians in full-time employment increased to 63,800 from a previous 25,700. Part-timers were down 2,900 as more people entered full-time work. Hourly wages rose 1.6 percent from a year earlier.
The unemployment rate is the lowest since December 2008. The data should convince the Bank of Canada that the economy is picking up and will be pressured not to cut interest rates. Also market speculation will be toned down as investors realize that the Canadian economy probably doesn’t require more stimulus.
“The (Bank of Canada) is going to be happy to see it, obviously, but I still think they are going to be concerned about the risks on the international outlook, with Europe and the U.S. So this is not going to change that perspective. If the U.S. struggles to add their own jobs, then that’s going to spell trouble for the rest of the economy in Canada. And you also have Europe which has yet to resolve their issues,” said Mazen Issa, Macro Strategist at TD Securities.
The focus now turns to the U.S. non farm payrolls report out later. That will affect the Canadian dollar depending on the results.
USDCAD tumbled from 1.0391 to 1.0338 within a minute, and continued further down to 1.0324.